2.18 Provisions, Contingent Liabilities and Contingent Assets
The Company creates a provision where there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are disclosed only when an inflow of economic benefit is probable.
2.19 Cash and Cash Equivalents
Cash and cash equivalents comprise cash and deposit with banks and corporations. The Company considers all highly liquid investments with a remaining maturity at the date of purchase of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.
2.20 Financial Instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments also include derivative contracts such as foreign exchange forward contracts.
Financial assets and liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets and liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value measured on initial recognition of financial asset or financial liability. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised in profit or loss.
Measurement and Recognition of financial instruments
The Company's accounting policies and disclosures require measurement of fair values for the financial instruments. The Company has an established control framework with respect to measurement of fair values. The management regularly
reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the management assesses evidence obtained from third parties to support the conclusion that such valuations meet the requirements of Ind AS, including level in the fair value hierarchy in which such valuations should be classified. When measuring the fair value of a financial asset or a financial liability, the Company uses observable market data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
If inputs used to measure fair value of an asset or a liability fall into different levels of fair value hierarchy, then fair value measurement is categorised in its entirety in the same level of fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognises transfers between levels of fair value hierarchy at the end of the reporting period during which the change has occurred.
(A) Financial Assets:
(i) Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(iii) Financial assets at fair value through profit or loss (FVTPL)
Financial assets are measured at FVTPL unless they are measured at amortised cost or at FVTOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets and liabilities at fair value through profit or loss are immediately recognized in the statement of profit and loss.
(iv) Derecognition
The Company derecognises a financial asset when the rights to receive cash flows from the asset have expired or it transfers the right to receive the contractual cash flow on the financial assets in a transaction in which substantially all the risk and rewards of ownership of the financial asset are transferred.
(B) Financial Liabilities
All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost. Financial liabilities are carried at amortized cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
Derecognition
The Company derecognizes a financial liability (or a part of a financial liability) from the Company's Balance Sheet when the obligation specified in the contract is discharged or cancelled or expires.
(C) Equity instruments
An equity instrument is a contract that evidences residual interest in the assets of the Company after deducting all of its liabilities. The Company is recognised equity instrument at the proceeds received net off direct issue cost.
(D) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously
2.21 Impairment of Assets
(i) Non-financial assets
Non-financial assets are tested annually for impairment or more frequently if events or changes in circumstances indicate that they may be impaired. An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is increased/ reversed where there has been change in the estimate of recoverable value. The recoverable value is the higher of the assets' net selling price and value in use.
(ii) Financial assets (other than a fair value)
The Company recognise loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit and loss. Loss allowance for the trade receivables with no significant financing component is measured at amount equal to life time ECL. For all other financial assets, ECLs are measured at an amount equal to the 12 month ECL, unless there has been significant increase in credit risk from initial recognisation in which case those are measured at lifetime ECL. The amount of ECLs (or reversal) that is required to adjust the loss allowance at reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in profit and loss.
2.22 Recent Pronouncements:
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended 31 March, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Note 5.1
i) In order to support its wholly owned subsidiary (WOS) Aurionpro Payment Solutions Pvt. Ltd. (AuroPay)to set up operations, ramp up the necessary infrastructure and also to meet the specific criteria of Net Worth as required by RBI from time to time, during the year, the Company has made further investment and subscribed to 1,85,00,000 compulsory Convertible Preference Shares of the face value of ' 10/- each amounting to ' 1,850 lakhs after obtaining approval of the Investment Committee of the Board.
ii) Pursuant to the approval of the Board of Directors dated 19/04/2024, the Company acquired majority stake (69.42%) in Arya.ai operated under legal entity Lithasa Technologies Private Ltd for an aggregate cash consideration of ' 135.11 Crores.
Note 16. Share Capital (Contd.)
4.1 Shares issue under ESPS
Pursuant to the approval from the Board of Directors on 25/07/2022 and Shareholders on 26/09/2022, Aurionpro Solutions Limited - Employee Stock Purchase Scheme 2022 ('ASL ESPS 2022') was instituted and Aurionpro Solutions Ltd - Employee Benefit Trust ('ASL ESPS Trust') was formed to administer the ESPS plan. During the current year the Company has made allotment of 10,00,000 equity shares of ' 10 each to ASL ESPS Trust' on 15/05/2023 under ASL ESPS 2022. ASL ESPS Trust is consolidated in the standalone financial statements of the Company.
4.2 Allottment of Equity Shares in lieu of share warrants :
During the year, the Company issued and allotted 8,00,000 equity shares which includes 5,00,000 share warrants exercised by allottees and converted in to equity shares on receipt of funds.
4.3 Allottment of Equity Shares on Preferential basis :
During the year, the Company has issued 11,17,935 equity shares on preferential basis in accordance with Chapter V of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, post approval of the Allotment Committee of the Board of Directors.
4.4 Qualified Institutional Placement ("QIP")
Pursuant to the approval of the Board of Directors dated 10/01/2024 for the Qualified Institutional Placement ("QIP"), approval of the shareholders dated 07/02/2024 and post receipt of In-principle approval of the BSE and NSE on 13/03/2024 the Company made allotment of 18,88,665 Equity Shares to the eligible Qualified Institutional Buyers("QIB") on 08/04/2024 at an issue price of ' 2,000 each for an aggregate subscription amount of ' 377. 73 crores.
Note 17.1
(i) Capital Reserve
The Company recognise profit and loss on sale, purchase and cancellation of the Company's own equity instruments to capital reserve.
(ii) Share Options Outstanding Account
Employee Share options reserve represents the cumulative expense recognized for equity-settled transactions at each reporting date until the employee share options are exercised/expired upon which such amount is transferred to Profit and Loss.
(iii) Securities Premium
Securities Premium Reserve is used to record premium on issuance of shares. The reserve is utilised in accordance with provisions of the Companies Act, 2013.
Note 17. Other Equity (Contd.)
Note 17.1 (Contd.)
(iv) Capital Redemption Reserve
As per Companies Act 2013, capital redemption reserve is created when company purchases it own shares out of profits. A sum equal to nominal value of the shares so purchased is transferred to capital redemption reserve. The reserve is utilized in accordance with the provisions of section 69 of Companies Act, 2013
(v) Retained Earnings
Retained earnings are the profits that the Company has earned till date, less any transfers to general reserve, dividends or other distributions paid to shareholders.
(vi) Other Comprehensive Income
Other Comprehensive Income refers to items of income and expenses that are not recognized as a part of the profit and loss account.
(vii) Restructuring Reserve
Pursuant to the Demerger, the difference between the net assets & liabilities transferred is included in Restructuring Reserve (after adjusting Capital Reserve & General Reserve).
Note 45. Share Based Payments
a) Employee Share Purchase Scheme
Aurionpro Solutions Limited had launched the "Employee Stock Purchase Scheme 2022" ("Scheme"). The scheme was approved by the Board on July 25, 2022, and which was subsequently approved by the shareholders on September 26, 2022. the Company had established "Aurionpro Solutions Ltd - Employee Benefit Trust" (ASL ESPS Trust) to administer the Scheme. On May 15, 2023, the company allotted 1,000,000 equity shares at ' 10 each to ASL ESPS trust to eligible employees, for promoting employee participation in the company's growth.
The core objective of the Scheme is to incentivize the employees to perform their best and enable them to enjoy the benefits of the value created over a long run.
The share-based payments (options) to employees being equity-settled instruments were measured at the fair value of the equity instruments of the Company at the grant date. The fair value determined at the grant date of the equity-settled share-based payments was expensed on a straight-line basis over the vesting period, based on the Company's estimate of equity instruments that will eventually vest, with a corresponding increase in Total Equity.
Note 47. Financial Instruments
(i) Valuation
All financial instruments are initially recognized and subsequently re-measured at fair value as described below:
The fair value of financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between the willing parties, other than in a forced or liquidation sale.
The fair value of investment in quoted Equity Shares, Bonds, Government Securities, Treasury Bills and Mutual Funds is measured at quoted price or NAV.
The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
The financial instruments are categorized into three levels based on the inputs used to arrive at fair value measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The carrying values of the financial instruments by categories were as follows:
(ii) Financial risk management
The Company's business activities expose it to a variety of financial risks, namely market risks, credit risk and liquidity risk.
The Company's focus is to foresee the unpredictability of financial markets and seek to minimize potential adverse effects on its financial
performance.
The Company's financial liabilities comprise of borrowings, trade payable and other liabilities to manage its operation and the financial
assets include trade receivables, deposits, cash and bank balances, other receivables etc. arising from its operation.
(i) Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.Market prices comprise three types of risk: Foreign currency rate risk, interest rate risk and other price risks, such as equity price risk and commodity risk.
(ii) Foreign currency risk : Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates.The carrying amounts of the Company's net foreign currency exposure denominated monetary assets and monetary liabilities at the end of the reporting period as follows:
Fair value sensitivity analysis for fixed-rate instruments
The Company does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss. Therefore, a change in interest rates at the reporting date would not affect profit or loss.
Cash flow sensitivity analysis for floating-rate instruments : Since floating-rate instruments is Nil, hence impact for the reporting period is Nil.
Equity Price Risk
The Company is exposed to equity price risks arising from equity investments which is not material.
Derivative Financial Instruments
The Company does not hold derivative financial instruments Credit Risk
Credit risk arises from the possibility that the counterparty will default on its contractual obligations resulting in financial loss to the Company. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, current economic trends, and analysis of historical bad debts and ageing of accounts receivable.
Trade Receivables
Our historical experience of collecting receivables is that credit risk is low. Hence, trade receivables are considered to be a single class of financial assets. Credit risk has always been managed by each business segment through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the Company grants credit terms in the normal course of business.
Other Financial Assets
Credit risk on cash and cash equivalents is limited as the Company generally invests in deposits with banks and financial institutions with high credit ratings assigned by international and/or domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units, quoted bonds issued by Government and Quasi Government organizations and certificates of deposit which are funds deposited at a bank for a specified time period.
Liquidity risk
Liquidity risk refers to risk of financial distress or extra ordinary high financing cost arising due to shortage of liquid funds in a situation where business conditions unexpectedly deteriorate and require financing. The Company's objective is to maintain at all times optimum levels of liquidity to meet its cash and collateral requirements. Processes and policies related to such risk are overseen by senior management and management monitors the Company's net liquidity position through rolling forecast on the basis of expected cash flows.
Note 49. Disclosure requirements as notified by MCA pursuant to amended Schedule III (Contd.)
(4) Return on Equity Ratio (in %) = Net Profit After Tax / Shareholder equity
(5) Inventory Turnover Ratio (in times) = Cost of goods sold / Average Inventory
(6) Trade Receivables Turnover Ratio (in times) = Revenue from operations/ Trade Receivables
(7) Trade Payables Turnover Ratio (in times) = Operating Expenses and Other expenses / Trade Payables
(8) Net Capital Turnover Ratio (in times) = Revenue from operations / Working Capital
(9) Net Profit Ratio (in %) = Net Profit After Tax / Revenue from operations
(10) Return on Capital Employed (in %) = Earnings before interest and tax / Capital employed (Net worth Long term borrowings -Deferred tax assets)
(11) Return on Investment (in %) = Interest income on bank deposits / Bank Fixed Deposits Other Statutory Information
(ii) The Company did not have any transactions with companies struck off under Section 248 of the Companies Act, 2013 or Section 560 of Companies Act, 1956 during the financial year.
(iii) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property
(iv) The Company has not been declared as a willful defaulter by any lender who has powers to declare a company as a willful defaulter at any time during the financial year or after the end of reporting period but before the date when the financial statements are approved.
(v) The Company does not have any cases where quarterly returns or statements of current assets filed by the Company with banks or financial institutions are not in agreement with the books of accounts.
(vi) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period
(vii) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(viii) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (Ultimate Beneficiaries) , or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(ix) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall :
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(x) The Company does not have transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961)
(xi) The Company has complied with the number of layers prescribed under clause (87) of section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017
Note 50. Prior Periods Comparative
The previous year figures have been regrouped / reclassified wherever necessary to make them comperable with those of the current year.
Note 51. Authorisation of Financial Statements
The financial statements were approved by the Board of Directors on May 14, 2024.
As per our attached report of even date
FOR C K S P AND CO LLP For and on behalf of the Board of Directors of Aurionpro Solutions Limited
Chartered Accountants CIN- L99999MH1997PLC111637
Firm Registration No. 131228W/W100044
Debmalya Maitra Paresh Zaveri Amit Sheth
Partner Chairman & Managing Director Co- Chairman & Director
Membership No 053897 DIN : 01240552 DIN : 00122623
Vipul Parmar Ninad Kelkar
Chief Financial Officer Company Secretary
Navi Mumbai, May 14,2024 Navi Mumbai, May 14,2024
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